The Complete Guide To Road Tax On Electric Cars

Road tax (or Vehicle Excise Duty) is calculated based on the amount of CO2 emissions a vehicle emits, with cars that produce more g/km of CO2 paying more each year.

Because electric cars don’t have a tailpipe and therefore release no greenhouse gases, you won’t need to pay any road tax on them. However, rather confusingly, you’ll still need to tax your electric car online.

Read on for a complete guide to taxing your EV.

2020 changes to road tax rates

From April 1 2020 the road tax bands for cars were changed in response to the new way vehicles are tested for emissions figures.

The WLTP (World Harmonised Light Vehicle Test Procedure) test has replaced the old NEDC (New European Driving Cycle) one, the latter of which was based on theoretical driving data. This was deemed outdated and in 2017 came real-driving data from the new WLTP test which better shows on-road performance and therefore gives a more accurate result.

On top of this, the government has decided to scrap the rule whereby new and existing electric cars with a list price of more than £40,000 had to pay an additional £325 each year. This was only charged from the second time the vehicle was taxed.

What do the changes mean for electric car tax?

While the new testing of vehicles has given more accurate information on CO2 emissions figures for cars, it also means that a lot of models now have higher reported levels of the gas.

For drivers of petrol and diesel models, the cost of road tax has increased to reflect these new figures. This is especially true for diesel cars which don’t meet the Real Driving Emissions 2 (RDE2) standard for nitrogen oxide emissions, but you can check this with the manufacturer of your car to make sure that it does comply.

Drivers of EVs on the other hand won’t have to pay the £325 ‘expensive car’ road tax until at least 31 March 2025, nor will they need to pay any standard annual rate as electric vehicles produce 0g/km of CO2.

Here’s what first-year road tax rates look like for cars registered from April 1 2020.

In the second year onwards, there’s a fixed rate of tax for each vehicle which looks like this:

  • Petrol and diesel cars – £150 for 12 months.
  • Alternative fuel (hybrid, bioethanol and liquid petroleum gas) – £140 for 12 months.
  • Electric – £0.

Hybrid car tax cost

If you have a hybrid or plug-in hybrid vehicle (PHEV) then the chances are you’ll still get a cheap tax quote for the first year and second year onwards thanks to most models having sub-100 CO2 emissions.

For example, the standard Toyota Prius emits 78g/km of CO2, which means first-year tax would be £100, followed by a ‘premium’ ongoing tax of £140.

Plug-in models, on the other hand, tend to use more electric power and can draw upon a bigger battery (hence why they need recharging like an electric car). The Toyota Prius PHEV is the most efficient in the range, with CO2 emissions of 28g/km, so your first-year tax would be free before having to pay the £140 fixed rate for alternative fuel vehicles.

What if my car was registered before the changes?

There’s a separate tax system for cars which were registered between 1 March 2001 and 31 March 2017 which rewards hybrid drivers a lot more than the new system.

The benefits, as you can see below, are more on a par with the tax exemptions electric car drivers see today.

Do I need to tax my electric car?

It’s a legal requirement that you tax your electric car, despite them being exempt from road tax. Not doing so could cost you a fine of up to £1,000.

The only exception is if you’re leasing your electric car, in which case road tax will most likely be included within your monthly payments, at least for the first 12 months. However, you should check with your leasing company whether you’re covered for the duration of your contract (if you’ve leased the car for 2-4 years), as it will be your responsibility to arrange for it to be taxed if not, though you won’t be charged for doing this.

 How to tax your EV

If your electric car isn’t declared as being off the road and you haven’t filled out a Statutory Off Road Notification (SORN) to say so – in which case, it must be off public roads in a garage or on a driveway – then you’ll need to tax it.

It’s a quick process and can be done all online here.

Before you start, you’ll need to have a reference number from either of the following:

  • A reminder (V11) or ‘last chance’ warning letter from the DVLA (Driver and Vehicle Licensing Agency).
  • Your car’s log book (V5C), which must be in your name.
  • The ‘new keeper’ slip from the log book (if you’ve recently bought it).

For full insight into electric car ownership, read our all-in-one EV guide

Looking for more information on electric cars before purchasing one? We’ve created an all-in-one guide which explains everything you need to know about EVs before you buy.

View electric car guide

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To find out more information on electric and hybrid cars, or motoring in general, head over to our guides page.

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